Don’t Put College On Your Credit Card

Most public schools charge convenience fees that can put you out hundreds of extra dollars a year

Just because you can pay for college with a credit card doesn’t mean you should.

The vast majority of colleges accept credit cards to pay tuition, but many charge extra for those credit card payments, according to a survey from creditcards.com. That means students and families can be stuck with hundreds of dollars in extra fees just for the convenience of paying with a credit card.

According to the report, 86 percent of public colleges and universities accept credit cards for a fee that averages 2.6 percent. Community colleges, however, are much more lenient: Only 8 percent of them accept cards for a fee. A surprising 89 percent are fee-free.

“It may make sense to charge tuition if you get rewards points and have the funds to pay off the debt quickly, but not if you have to pay a service charge to do so,” says financial planner Joseph Orsolini with College Aid Planners.

Three hundred of the largest schools in the country were part of the survey: public, private, and community schools. The vast majority of students are paying for school with student loans, not credit cards. Sallie Mae says less than 2 percent of families turn to credit cards to pay for college.

“If your college charges a high convenience fee, it’s not worth paying your tuition with a credit card,” says Matt Schulz, CreditCards.com senior industry analyst. “Especially if you have outstanding student loan debt, it’s unnecessary to dig yourself more deeply into debt just to pay with plastic.”

The report also says card expansion is slowly growing, but fee-free payments are vanishing. More schools than ever charge a fee for card payments, and in some cases the fees are increasing. Nine schools have higher fees now than in 2014. The average fee is 2.62 percent, and the highest is Roger Williams University in Bristol, Rhode Island, which charges 3 percent.

How to pay for college without a credit card

Most everyone thinks college is worth it, especially some young people who expect their parents to pay for whatever college they want. But what if you and your family aren’t financially prepared for the burden of college costs?

Keep in mind that student loans can help keep college in reach, but they are a very long-term commitment. Debt is crippling many graduates and their families with more than $1.2 trillion nationwide. Student loan debt has skyrocketed nearly 70 percent in the last five years.

Get your money right

Many college graduates admit there’s one thing college didn’t teach them: how to handle their finances. While many grads believe they should’ve gotten an education in personal finance, most feel like they’re tackling their money problems by themselves. But you don’t have to end up alone.

College students can get credit cards right now, and there are some that are made especially for them. These cards are specifically geared toward young credit-builders who may not have a lengthy credit report to showcase good behavior. Look for cards that will give a college student the chance to prove they can handle using a credit card, and allow for a few mistakes.